If you’ve read “Our Story” you know that we are currently in a recovery phase from a Chapter 7 bankruptcy and the short sale of our totally submerged in the deep end of the ocean, home. How can you be in recovery and still be paying off consumer debt? It hasn’t been easy to recover, but we are doing it one step at a time.
Get a Credit Card: Yes, it seems counter intuitive to get a credit card immediately after filing bankruptcy, but that’s just about what we did. One year after our discharge, Michael obtained a credit card. Roughly 18 months after, I did.
Make Charges on the Card and Pay them off immediately. It isn’t the “getting the card” that is important. It’s the using it responsibly part that increases your credit score. Paying off in full, every month and on time! This is also the slippery slope that one must tread. We used them in the beginning for purchases that were already budgeted: gas, groceries, utilities.
Take out a Car loan :
Slightly less than 2 years after our Bankruptcy discharge, we were in dire need of a car. We went to the family “car guy,” shopped for a car, applied for the loan and found we both had credit scores over 700 and were able to obtain the optimal financing for our new car. The very next day, Michael was laid off. Good times!
We waited 5 years from the date of our discharge to decide to leave our home. We loved it. Wanted to do “the right thing”. Turns out– the “right thing” for a family of five-to-be is to call a spade a spade and operate like we we’re a multi-million dollar business and cut our losses. Take the slap on the hand and wear the proverbial Scarlet Letter. The short-sale process is sticky, because the home first has to be in default: foreclosure proceedings need to be started. All our hard work was for nothing, it seems.
We’re back at the bottom of the pit only we aren’t afraid and embarrassed like we were when we declared Bankruptcy. The 1 year anniversary of our closing on the short-sale is coming up in February. The further we are away from this date, the better our score will look. We’re owning every sentence to our story- every emotion, credit card purchase, and bad decision. The good ones too. (There were some great ones! Like deciding to have an “oops” baby!)
If you are considering Bankruptcy, home foreclosure or short-sale, please seek the advice of an attorney or credit counseling specialist. Our story is specific to our situation and can not be constituted as “expert advice”.